Redports uranium draws bidadmin
A third explorer is now in the sights of a predator with Redport yesterday recommending that shareholders accept a paper offer valued at 14c a share from Canada’s Mega Uranium.
Redport’s share price managed to reach only 13.5c yesterday but was a considerable improvement on its drop to 9.4c in May.
Redport chairman Richard Homsany said Mega’s offer represented a 33 per cent premium to his company’s recent share price.
This merger would fulfil Redport’s objective of becoming an international uranium company, he added.
Mega earlier this year paid just under $20 million for Hindmarsh Resources, which had a large number of tenements in South Australia.
On Thursday, Hong Kong investment bank Crosby Capital Partners made a 68c-a-share bid for another South Australian explorer, Marathon Resources. This bid, however, is unlikely to succeed as it seems to be pitched too cheaply and because the directors, who own 22.8 per cent, say they won’t sell.
The effective takeover of Redport adds a new dimension to the inevitable consolidation of the industry: most of its prospects are in Western Australia, where the state Government has banned uranium mining.
Only South Australia and the Northern Territory are sympathetic to the industry.
This indicates that the Canadians are prepared to take the long view and expect that state government policies on uranium will eventually change.
But investors are also taking the hint that this is not the full extent of Mega’s ambitions.
They yesterday marked up Nova Energy, which has uranium prospects in the same region of Western Australia, from 15c to $1.39. It is understood that Redport at one stage contemplated a merger with Nova.
The new takeovers will be a tonic for the junior uranium sector, where prices have come off substantially after the bull run for many companies in the first months of 2006.
Toro Energy, for example, hit $1.395 in March but closed yesterday at 69.5c. Nova itself is well off its $1.85 high on March 4.
Mega, which is capitalised at about $440 million, holds the advanced Ben Lomond project in Queensland with its 4850-tonne resource along with properties in South Australia and the Northern Territory.
Mega also has prospects in Argentina, Bolivia and Mongolia. It is offering 10 Mega shares for every 574 Redport counters, along with 10 shares for every 894 Redport 5c listed options and 10 shares for every 1479 unlisted 12c options.
Redport’s main asset is its Lake Maitland project, where it has made good grade intercepts. The deposit is shallow, meaning a low stripping ratio. A resource statement is due by late September.
Earlier this year, Redport acquired adjacent ground from View Resources, adding an estimated 996 tonnes of uranium.